Richard Koch on Mastering the 80/20 Principle, Achieving Unreasonable Success, and the Art of Gambling (#466)
Photo by Daniel Park “If you don’t know what you’re doing, you can be very creative about it.”
— Richard Koch
Richard Koch (@RichardKoch8020) is an entrepreneur, investor, former strategy consultant, and author of several books on business and ideas, including four on how to apply the 80/20 principle in all walks of life.
His investments have grown at 22 percent compounded annually over 37 years and have included Filofax, Plymouth Gin, Belgo, Betfair (the world’s largest betting exchange), FanDuel, and Auto1. He has worked for Boston Consulting Group and was a partner at Bain & Co. before joining Jim Lawrence and Iain Evans to start LEK, which expanded from three to 350 professionals during the six years Richard was there.
In 1997, Richard’s book The 80/20 Principle reinterpreted the Pareto Rule, which states that most results come from a small minority of causes, and extended it beyond its well-known application in business into personal life, happiness, and success. The book, substantially updated in 2017, has sold more than a million copies, been translated into roughly 40 languages, and become a business classic. It was named by GQ magazine as one of the top 25 business books of all time.
His new book, published on August 13, 2020, and available in the US in December, is Unreasonable Success and How to Achieve it. In it, Richard charts a new map of success, which he says can propel anyone to new heights of accomplishment. High success, he says, does not require genius, consistency, all-round ability, a safe pair of hands, or even basic competence—but it does require the nine key attitudes and strategies he has identified.
Please enjoy!
Listen to the episode on Apple Podcasts, Spotify, Overcast, Stitcher, Castbox, Google Podcasts, or on your favorite podcast platform.
Brought to you by Boll & Branch, Vuori Clothing, and Athletic Greens. More on all three below.
Listen onApple Podcasts[image error]Listen onSpotify
[image error]Listen onOvercast
#466: Richard Koch on Mastering the 80/20 Principle, Achieving Unreasonable Success, and The Art of Gambling
https://rss.art19.com/episodes/a691b027-5edf-4218-af3c-852b684f2ede.mp3Download
This episode is brought to you by Boll & Branch! When I decided to overhaul my life for better sleep, I landed on Boll and Branch for linens. They are incredible, and you’ll feel the difference immediately. They are the softest and most comfortable pure organic cotton sheets available. They’re thousand-dollar quality for a fraction of the price, starting at just one hundred and sixty dollars.
And right now, you, my dear listeners, can get $50 off any sheet set using promo code TIMTIM. Restrictions may apply.
This episode is also brought to you by Vuori Clothing! Vuori is a new and fresh perspective on performance apparel. Perfect if you are sick and tired of traditional, old workout gear. Everything is designed for maximum comfort and versatility so that you look and feel as good in everyday life as you do working out.
Get yourself some of the most comfortable and versatile clothing on the planet at VuoriClothing.com/Tim. Not only will you receive 20% off your first purchase, but you’ll also enjoy free shipping on any US orders over $75 and free returns.
This podcast is also brought to you by Athletic Greens. I get asked all the time, “If you could only use one supplement, what would it be?” My answer is usually Athletic Greens, my all-in-one nutritional insurance. I recommended it in The 4-Hour Body in 2010 and did not get paid to do so. I do my best with nutrient-dense meals, of course, but AG further covers my bases with vitamins, minerals, and whole-food-sourced micronutrients that support gut health and the immune system.
Right now, Athletic Greens is offering you their Vitamin D3/K2 Liquid Formula free with your first purchase—two vital nutrients for a strong immune system and strong bones. Visit AthleticGreens.com/Tim to claim this special offer today and receive the free D3/K2 bundle with your first purchase! That’s up to a one-year supply of Vitamin D as added value when you try their delicious and comprehensive all-in-one daily greens product.
What was your favorite quote or lesson from this episode? Please let me know in the comments.
SCROLL BELOW FOR LINKS AND SHOW NOTES…
Want to hear another episode with an investor who has a unique perspective on the world? Listen to my conversation with Howard Marks, in which we discuss unintended consequences, the state of the COVID-19 economy, higher-signal sources of information, crowded versus uncrowded opportunities, and much more.
#431: Howard Marks on the US Dollar, Three Ways to Add Defense, and Good Questionshttps://rss.art19.com/episodes/679391c5-c2db-4640-af95-710dc3afd09e.mp3Download
SELECTED LINKS FROM THE EPISODE
Connect with Richard Koch:
Unreasonable Success and How to Achieve It by Richard KochThe 80/20 Principle: The Secret to Achieving More with Less by Richard KochWindsor CastleDavid Bowie 2002 Interview with Michael Parkinson | YouTubeBodleian Libraries | University of OxfordCours d’Économie Politique. Professé a l’Université de Lausanne. by Vilfredo Pareto | AbeBooks | InvestopediaInterview: Richard Koch, Author of The 80/20 Principle | Boing BoingLenin, Stalin, and Hitler: The Age of Social Catastrophe by Robert GellatelyBetfairBoston Consulting Group (BCG)The Star Principle: How It Can Make You Rich by Richard KochCVC May Bid for Gambling Firm Betfair | The GuardianL.E.K. ConsultingHorse Racing Cards, Results & Betting | Racing PostApple’s Segmentation Strategy, and the Folly of Conventional Wisdom | O’Reilly RadarPrice Simplifying Vs. Proposition Simplifying: Understanding Your Options by Richard Koch | Entrepreneur“Up or Out” Policy: What It’s Like to be Pushed Out Of McKinsey, BCG, or Bain | CaseCoachComputacenterBain & CompanyGoldman SachsHeadhunter | InvestopediaWhat Is the Growth Share Matrix? | BCGComparison and Usage of the Boston Consulting Portfolio and the McKinsey-Portfolio | Hochschule AalenVanderbilt UniversityThe Boston Consulting Group on Strategy: Classic Concepts and New Perspectives Edited by Carl W. Stern, George Stalk, Jr., and Michael S. DeimlerGood Strategy, Bad Strategy: The Difference and Why It Matters by Richard RumeltFinancial Times Guide to Strategy: How to Create, Pursue and Deliver a Winning Strategy by Richard KochRichard Koch: $100 Million Net Worth Without 80-Hour Workweeks | Mergers and InquisitionsThe Financial Times Guide to Management and Finance: An A-Z of Tools, Terms and Techniques by Richard KochManaging Without Management : A Post-Management Manifesto for Business Simplicity by Richard KochThe ‘Law’ That Explains Why You Can’t Get Anything Done | BBC WorklifeDavid Yarrow on Art, Markets, Business, and Combining It All | The Tim Ferriss Show #443Flow: The Psychology of Optimal Experience by Mihaly CsikszentmihalyiWhat My Morning Journal Looks Like | tim.blogThe Artist’s Way Morning Pages Journal: A Companion Volume to the Artist’s Way by Julia CameronOutliers: The Story of Success by Malcolm GladwellForget Liverpool. Hamburg, Germany, Made the Beatles into the Band They Became | Los Angeles TimesBoris Johnson’s Plan to Get Brexit Done and ‘Hang the Consequences’ | Foreign PolicyBob Dylan Meets Woody Guthrie, January 29, 1961 | Music History CalendarSong to Woody by Bob DylanBlowin’ in the Wind by Bob DylanJeff Bezos In 1999 on Amazon’s Plans Before the Dotcom Crash | CNBCA Short History of the Falklands War | Imperial War MuseumsLenin’s Brother: The Origins of the October Revolution | Foreign AffairsHow Walt Disney Funded His Dream by Richard Koch | HuffPostPlane Crazy 1928 Sound Cartoon | Walt Disney Animation Studios5 Facts You May Not Know About Disney and Dali’s Lost Project ‘Destino’ | Park West GalleryIn Search of Excellence: Lessons from America’s Best-Run Companies by Tom Peters and Robert H. Waterman, Jr.Who Were the Mensheviks and Bolsheviks? | ThoughtCo.Antifragile: Things That Gain from Disorder by Nassim Nicholas TalebChurchill the Failure: The Paradoxical Truth About the Best and Worst Leaders | ForbesReality Distortion Field | WikipediaA Visit to Robben Island, the Brutal Prison that Held Mandela, Is Haunting and Inspiring | Smithsonian Magazine
SHOW NOTES
Note from the editor: Timestamps will be added shortly.
Richard begins with a non-story story involving wines and spirits, chat show reinvention, Michael Parkinson, Windsor Castle, and David Bowie.Why I’ve made the rare exception for Richard with my “I don’t give quotes for books” policy.What secrets were revealed to Richard in Oxford’s Bodleian Libraries?What’s Richard’s own peculiar talent, and how did he discover it?How is it possible for Richard to be somewhat hopeless with numbers, yet have such a good investing track record? Here’s where the star principle comes into play.How did Richard decide on a bet size of $1.5 million in a certain investment?In his book The Star Principle, what does it mean when a business can “segment itself?”What are the principles that govern the constitution of Richard’s own portfolio?Richard fills us on the circumstances surrounding his firing from BCG and what happened afterward when he met Bill Bain.What is the growth share matrix (aka the Boston box)?What did Bain and Company appreciate about Richard that was not appreciated at BCG?What was the result of being asked to behave like a partner at Bain and Company nine months before Richard could officially be announced as one?What has Richard picked up from the book Perspectives on Strategy by BCG that makes it a recommended read? What are some additional titles that make the cut?Why does Richard consider principles better than knowledge, and how did his book The 80/20 Principle come to be?What makes Richard most happy? How does he ensure he’s allocating his time and energy appropriately to optimize that happiness?The two types of journaling I enjoy compared to Richard’s journaling style.Who has more fun in life: adventurers or controllers?What was the spark that prompted Richard to write his new book, Unreasonable Success and How to Achieve It?How does Richard define success, and what are the nine landmarks he’s found present in 20 people he considers successful?Landmark one: self-belief (and what you might do if you lack it).Landmark two: Olympian expectations.Landmark three: transforming experiences. (And if someone hasn’t had a transforming experience, is it possible to engineer one?)Landmark four: one breakthrough achievement (and how this differs from the other landmarks).Landmark five: make your own trail.Landmark six: find and drive your personal vehicle.Landmark seven: thrive on setbacks.Landmark eight: acquire unique intuition.Landmark nine: distort reality.How do these landmarks often reinforce one another?What Nelson Mandela did to acquire unique intuition during what could have been the bleakest time in his life.The annual question Richard asks himself in lieu of committing to new year’s resolutions.Parting thoughts.
PEOPLE MENTIONED
Michael ParkinsonDavid BowieVilfredo ParetoAdolf HitlerVladimir LeninJoseph StalinAntony BallAdrian MitchellPhil HulmeRoy BarberEgon ZehnderBruce HendersonBill BainRalph WillardMitt RomneyFred ReichheldMark AllenRichard BurtonNicholas BrealeyNorthcote ParkinsonMihaly CsikszentmihalyiBob DylanOtto von BismarckWinston ChurchillHerb AsquithMalcolm GladwellJohn LennonBill GatesJeff BezosMarie CurieLeonardo da VinciWalt DisneyAlbert EinsteinViktor FranklSigmund FreudAlfred AdlerJohn Maynard KeynesMadonnaNelson MandelaJ.K. RowlingHelena RubinsteinPaul of TarsusJesusMargaret ThatcherBoris JohnsonHarry PotterWoody GuthrieDavid ShawLeopoldo GaltieriAleksandr UlyanovMickey MouseSalvador DaliTom PetersRobert H. Waterman, Jr.Snow WhiteDonald DuckNassim Nicholas TalebSteve JobsBob IgerTobi LütkeP.W. BothaF.W. de Klerk
